Shares in Independent News & Media gained five cent to close at €3.16 last night after the group beat consensus expectations with a 10.4 per cent rise in profits before tax and exceptionals to €265.7 million.
The group's performance in 2005 was flattered by a €62.7 million gain on the sale of iTouch, so the year-on-year pretax profit in 2006 was down by as much as 8.2 per cent, at €250.1 million when all once-off items were included.
In spite of a strong operational performance, these were significant. Exceptional items account for a net charge of €15.6 million in 2006, in contrast to a net gain of €30.5 million in 2005. Still, a 13.4 per cent drop to €198.4 million in net profits after exceptional items did not deter the group from increasing its full-year dividend by almost 16 per cent.
More than €350 million is on the way from a likely buyout of Australian group APN, and attention now shifts to the group's plans for the proceeds of that transaction. There is every possibility that Sir Anthony O'Reilly and other shareholders will receive further payouts from a once-off return of money.
Chief operations officer Gavin O'Reilly would not on comment on the likelihood of a special dividend, but finance chief Donal Buggy suggested in a Reuters interview that the options included "selective acquisitions, further dividend increases or even maybe a share buyback".
In Gavin O'Reilly's account, India and Indonesia were in favour "as markets of great interest" at the moment. "There are some around India that we find interesting, that we would be able to build on the footprint that we already have in India. Indonesia I think is a particularly interesting market."
Independent is no longer examining opportunities in Russia, he said. "The political backdrop is not one that would encourage investment for us."
On the home front, the group said there had been no diminution of property advertising and it made light of the possibility of a big uplift in advertising revenues from the unwinding of the SSIA scheme.
Workers at Independent headquarters on Talbot Street, Dublin have stated their opposition to outsourcing, but the group said it was "pleasantly surprised" by the level of interest in a redundancy package.
There is still no clarity as to the long-term intentions of 5 per cent shareholder Denis O'Brien. Suffice to say that he will survey this scene with interest.
